Market research in Australian SMEs: An empirical study
Taylor and Francis
Faculty of Business and Public Management
School of Finance and Business Economics
This paper discusses the role of market research in small and medium enterprises (SMEs) in Australia, examining the market research practices (if any) adopted by such businesses and the purpose for which it is used. Over 700 Australian SMEs were randomly chosen from a business enterprise database. Using a mail survey, data were obtained as to their marketing and intelligence gathering (market research) practices, as well as a demographic profile of these businesses and their owners. The results obtained suggest that Australian SMEs engage in very little formal intelligence gathering and rarely used external consultants. However, there was a wide variation in responses. In the present sample, larger SMES tended to use market research more than smaller or micro businesses. Customer contact was the main source of information gathering for most firms and personal contact with non-customers also appeared to be a major way of generating new business. Generally, market research was viewed as too involved and too complicated, exclusively in the realm of educated market researchers and generally used by consultants to make money. Some respondents who attempted market research with consultants appeared to have spent money without getting positive results, adding to their negative perceptions. Many respondents also perceived market research to be an abstract concept and could not see how it could help them. Respondents felt that most of their income was generated from personal contacts and word of mouth. Consequently, there was no need for generalised market research. Their view was that, as long as personal contacts were maintained and word of mouth channels were open, there was no problem. These findings have several implications for marketers and marketing educators. It appears that market research will have difficulty in the SME sector unless research is tailored to meet their needs. At present, most market research principles come from the large business domain and there is a need to reshape such thinking to take account of the nature of Australian SMEs. Added to this, there is a need to modify SME managers’ perceptions of the value of market research. Further, given the number of ‘business researchers’, the intuitive nature of marketing compared to other disciplines such as accounting or finance which require rigorous treatment, and the unregulated nature of the industry with no representative, high profile body, there is a strong impression that no formal training is required to undertake market research.